Atsushi Mimura, Japan’s Vice Finance Minister For International Affairs and top foreign exchange official, on Monday, warned against speculative moves on the foreign exchange (FX) market as the Yen fell below 149 per dollar, per Reuters.
"We will monitor currency market moves including speculative trading with a sense of urgency," said Mimura.
Market reaction
At the time of press, the USD/JPY pair was down 0.14% on the day at 148.51.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds firm above 0.6800 on risk appetite
AUD/USD holds mild gains above 0.6800 in Asian trading on Monday, snapping a two-day losing streak. The pair benefits from expectations of more Chinese stimulus, which lifting risk sentiment and weighs on the safe-haven US Dollar. The focus shifts to Fedspeak and RBA Minutes.
USD/JPY keeps the red around 148.50 amid Japan's verbal intervention
USD/JPY stalls its bounce and remains in the red at around 148.50 in Monday's Asian session. Japanese verbal intervention continues to outweigh reduced bets for more BoJ rate hikes and a risk-on market mood, keeping the pair undermined. Fedspeak is next on tap.
Gold price extends range play below record high, bulls not ready to give up yet
Gold price remains on the defensive amid reduced bets for a 50 bps Fed rate cut in November. The USD consolidates last week’s strong gains and also contributes to capping the XAU/USD. Geopolitical risks might continue to act as a tailwind and limit losses for the precious metal.
Week ahead: What are the financial markets watching this week
Aside from geopolitical risk, this week’s macro drivers include the US CPI inflation report, the Federal Open Market Committee meeting minutes, and the Reserve Bank of New Zealand’s rate announcement.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.